As some examples, beginning 1951 it was $3600.00, then $4200.00, then $4800.00 through 1965, then in 1978 it was $17,700, 1981 was $29, 700.00, 1985 was $39600.00, $51,300.00 in 1990, $61,200.00 in 1995 and $76,200.00 in 2000.

Social Security then takes those earnings, and indexes them to wages today- in other words, what would the earnings you earned in 1978 (up to the maximum of $17,700) be worth today. The indexed earnings could be worth between thirty something thousand to over $70,000.00 today. We index all your years up to the year you reach age 60. From age 60 on, we only use your actual earnings, not your indexed earnings. Then we pick and choose your high 35 years of indexed and/or actual earnings and that is what we average.

We then apply a formula to the average and this is where the "social insurance benefit of "social security" is found. In 2005, the first $627.00 of the average monthly earning is replaced at 90%. The higher the average after that, the less replacement value (32% up to $3779 of the average, and 15% of the average over $3779.00. So this is how lower income workers receive a benefit with more replacement value than higher income workers.

But that is not to say that Social Security as a whole program (not just retirement) is a bad deal for high income workers. Because the Social Security survivors and disability programs cover young workers of any age and use far, far less years in the computation- as little as two. So a person who dies young or becomes disabled at a young age, receives a benefit payment far in excess of what they have paid into Social Security or what a private annuity would pay them for years into the future. Ask any family of September 11, 2001 how much their family is receiving in SS benefits for the number of months and years until their youngest child turns 18, and I don't think it can be matched by any sort of private plan (but that is getting political).

A real life example from last week: a mother died at age 32 in a car accident and left a husband (out of work) and 2 children aged 6 and 9. That family will receive $1650.00 per month until the youngest child graduates H.S. That mother's highest year of earnings was one year of $29,000.00, working in a factory and another year of $11,000.00 working as a babysitter. Those were the 2 years of earnings that produced the monthly benefit of $1650.00 which will continue for the next 12 or so years. This is why Social Security is so important as a social insurance program.